Markets Remain Tough Crowd for Policymakers

The recent efforts of economic policymakers to calm jumpy markets have been met with skepticism. In July, Federal Reserve Chairman Kevin Warsh delivered a press conference that was panned by the U.S. government bond market, leading to a sharp uptick in Treasury yields.

U.S. Treasury Secretary Scott Bessent's approach to buying back long-term U.S. Treasurys also failed to move the market for more than a moment. His efforts were seen as an attempt to push down yields.

The Bank of Japan recently raised its key interest rate to 1.25% in part to cool inflation and bolster the strength of the yen, which has weakened by over 5.5% against the U.S. dollar over the last 12 months.

Despite the rate hike, the yen still stumbled after the decision was announced, with comments from Bank of Japan governor Kazuo Ueda not being definitive enough to convince traders that the BoJ would continue raising rates if needed.